Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets The budget director of Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for March is summarized as follows: a. Estimated sales for March by sales territory: Maine: Backyard Chef 350 units at $800 per unit Master Chef 200 units at $1,400 per unit Vermont: Backyard Chef 400 units at $825 per unit Master Chef 240 units at $1,500 per unit New Hampshire: Backyard Chef 320 units at $850 per unit Master Chef 200 units at $1,600 per unit b. Estimated inventories at March 1: Direct materials: Grates 320 units Stainless steel 1,700 lb. Burner subassemblies 190 units Shelves 350 units Finished products: Backyard Chef 30 units Master Chef 36 units c. Desired inventories at March 31: Direct materials: Grates 300 units Stainless steel 1,500 lb. Burner subassemblies 210 units Shelves 400 units Finished products: Backyard Chef 40 units Master Chef 26 units d. Direct materials used in production: In manufacture of Backyard Chef: Grates 3 units per unit of product Stainless steel 24 lb. per unit of product Burner subassemblies 2 units per unit of product Shelves 4 units per unit of product In manufacture of Master Chef: Grates 6 units per unit of product Stainless steel 42 lb. per unit of product Burner subassemblies 4 units per unit of product Shelves 5 units per unit of product e. Anticipated purchase price for direct materials: Grates $16 per unit Stainless steel $8 per lb. Burner subassemblies $120 per unit Shelves $12 per unit f. Direct labor requirements: Backyard Chef: 0.50 hr. at $18 per hr. 0.60 hr. at $16 per hr. Stamping Department Forming Department Assembly Department Master Chef: Stamping Department 1.00 hr. at $15 per hr. 0.60 hr. at $18 per hr. Forming Department 0.80 hr. at $16 per hr. Assembly Department 1.50 hrs. at $15 per hr. Required: 1. Prepare a sales budget for March. Gourmet Grill Company Sales Budget For the Month Ending March 31 Unit Sales Unit Selling Volume Price Product and Area Total Sales Backyard Chef: Maine Vermont New Hampshire Total Master Chef: Maine Vermont New Hampshire Total Total revenue from sales 2. Prepare a production budget for March. Gourmet Grill Company Production Budget For the Month Ending March 31 Units Backyard Chef Master Chef Expected units to be sold Plus desired inventory, March 31 Total units required Less estimated inventory, March 1 Total units to be produced 3. Prepare a direct materials purchases budget for March. Gourmet Grill Company Direct Materials Purchases Budget For the Month Ending March 31 Grates (units) Stainless Steel (Ib.) Burner Sub- assemblies (units) Shelves (units) Total Required units for production: Backyard Chef Master Chef Plus desired inventory, March 31 Total units required Less estimated inventory, March 1 Total units to be purchased Unit price $ $ $ Total direct materials to be purchased 4. Prepare a direct labor cost budget for March. Gourmet Grill Company Direct Labor Cost Budget For the Month Ending March 31 Stamping Department Forming Department Assembly Department Total Hours required for production: Backyard Chef Master Chef Total hours required Hourly rate Total direct labor cost
